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DOING BUSINESS INDEX

(Increasing the investment attractiveness of Ukraine)


The investment attractiveness is a very important criterion for any developing country. This importance is explained not only by new opportunities and the integration in global economic processes, but also by the fact that obtaining a status of investment-attractive country should be based on a wide range of systemic changes that improve the business climate in a country, make the relationship between governmental institutions and businesses more transparent and reform the economy as a whole. The World Bank’s Doing Business index reflects the degree of favorable environment for doing business in a given country.

CURRENT SITUATION* Despite a huge number of changes, Ukraine is improving own position in the Doing Business ranking too slowly that confirms it has no comprehensive approach to reforms.

32 UKRAINE

32 reforms (for 10 years)

1

80

JAPAN

UKRAINE

1 reform (for 10 years)

34 JAPAN

80th position in the 34th position in the Doing Business Doing Business ranking ranking Georgia

Poland

Ukraine

Romania

Position by a number of reforms implemented

2

10

11

12

Number of reforms implemented

46

33

32

31

Position in the Doing Business ranking

16

24

80

36

* According to the World Bank’s data


LAST YEAR’S CHANGES ADOPTED DRAFT LAWS THAT INFLUENCED THE RANKING OF 2017 Law of Ukraine #289-VIII

1. Investors and their representatives don’t have the right to vote in resolving issues involving transactions they are interested in 2. Introducing an institute of independent members of supervisory boards 3. Establishing a committee on public company audit 0.5

Introducing the possibility of paying court fees online by the State Judicial Administration of Ukraine (the reform was implemented without amending the legislation)

0.5

ADOPTED DRAFT LAWS THAT WILL INFLUENCE THE RANKING OF 2018 Law of Ukraine #5021-VI* * adopted in 2012

1

Starting from 1/01/2017, a standard (simplified) procedure to connect the electricity-generating equipment with capacity of up to 160 kW to electrical grids is introduced

17

Law of Ukraine #835-VIII

The term for registration of legal entities was reduced to a period of 1 to 3 days 0

7 by a component of starting a business

13 Law of Ukraine #909-VIII

The unified social tax rate was reduced

Law of Ukraine #834-VIII

4

Notaries obtained access to the State Land Cadastre 0

REGISTERED DRAFT LAWS THAT WILL INFLUENCE THE RANKING OF 2018 #5073

Introducing a simplified (electronic) procedure to review small-size claims in court

#3132

1 #4195

#4194

#3665

Improving specific provisions that regulate a procedure of proceedings on bankruptcy

Abolishing a procedure of registering declarations and making a professional higher education for architects compulsory 3

#4188

Introducing a trust property concept as a way to secure the performance of obligations 7

12 by a component of starting a business

Settling the mediation process and the status of mediators 1

#4187

4 by a component of registering companies

Abolishing provisions of the laws that require seal impression on documents 1

21

2

Simplifying a procedure to register newly created legal entities as VAT payers 0

3 by a component of registering the real estate

#3610

Abolishing a share contribution in settlement’s infrastructure 6


BRDO EXPERTS DEVELOPED A COMPREHENSIVE DRAFT LAW

STARTING A BUSINESS

4

Abolishing requirements on documents with seal impression (– 1 procedure, – 2 days) Simplifying a procedure to register newly created legal entities by VAT payers

DEALING WITH CONSTRUCTION PERMITS

11

Abolishing a share participation in settlement’s infrastructure Abolishing a requirement to obtain initial data from the State Emergency Service of Ukraine Introducing a requirement for architects to have a higher professional education

REGISTERING PROPERTY

1

Abolishing a practice to demand and obtain monetary valuation of land plots in the notarization of contracts between legal entities Introducing a mechanism of administrative appeals of decisions made by a land cadastre registrar

GETTING CREDIT

5

Introducing a trust property concept as a way to secure the performance of obligations Improved access to information on debtors’ honesty


PROTECTING MINORITY INVESTORS

10

Providing a possibility to demand and obtain a category of evidences in the economic process Establishing a “higher reliability� standard during a procedure of proof in the economic process Establishing liability for misuse of rights and infliction of harm to a company or a minority investor by majority shareholders

ENFORCING CONTRACTS

2

Submitting a claim in electronic format and sending its copy to a defendant Enhancing options to use arbitration for disputes

RESOLVING INSOLVENCY

8

Introducing simplified bankruptcy procedures for companies, which have a majority creditor or the property of which was fully pledged

OUR PROSPECTS TOP 30 IN 2018

41


IMMEDIATE RESULT In addition to improving the overall investment climate in Ukraine, the comprehensive draft law developed by our experts will lead to a wide range of sectoral improvements:

DEALING WITH CONSTRUCTION PERMITS 15.2% 39

5.2%

THE PERCENTAGE OF PROCEDURES IN CONSTRUCTION COSTS

GROWTH BY CRITERIA 140

Before adoption After adoption

Position before adoption Position after adoption

INSOLVENCY

1

REDUCING THE TIMING OF PROCEDURES from 3 years to 1 year

REDUCING THE COST OF PROCEDURES FOR CREDITORS

by 45%

97

GROWTH BY CRITERIA

45%

150 Position before adoption Position after adoption

ENFORCING CONTRACTS

+1

57

+ 1 STEP TO RESUMPTION OF LENDING (resumption of a civilized nonjudicial instrument to resolve disputes)

GROWTH BY CRITERIA 81

Position before adoption Position after adoption

GETTING CREDIT

+1

7

+ 1 STEP TO RESUMPTION OF LENDING (creation of a smart instrument

to protect creditors› rights)

GROWTH BY CRITERIA 20

Position before adoption Position after adoption


THE GOVERNMENT SUPPORTED THE COMPREHENSIVE DRAFT LAW On November 23, Maksim Nefyodov presented a comprehensive draft law to improve the investment climate in Ukraine, which was developed by our experts, at the meeting of the Cabinet of Ministers of Ukraine.

He emphasized that this draft law could raise the Ukraine in the Doing Business ranking at least by 40 positions the following year. The decisions included to this draft law are related to the leading sectors of doing business, starting from construction to IT. The Government led by Volodymyr Hroysman supported this draft law.


+38 (044) 332 49 12 | office@brdo.com.ua | www.brdo.com.ua Khoryva St., 55K | Kyiv, 04071, Ukraine

Doing business index report-2016 (Eng)  
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